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Study on different options for communicating environmental information for products
Final report
European Commission – DG Environment 6 February 2012
2 | Study on different options for communicating environmental information for products
Document information
CLIENT European Commission – DG Environment
CONTRACT 07.0307/2011/600601/ETU/C1
REPORT TITLE Final report
PROJECT NAME Study on different options for communicating environmental information for products
PROJECT TEAM BIO Intelligence Service, with support from IPSOS and Ecologic
PROJECT OFFICER Mr. Michele Galatola, DG Environment
DATE 6 February 2012
AUTHORS Mr. Shailendra Mudgal, BIO Intelligence Service Ms. Kurt Muehmel, BIO Intelligence Service Ms. Mary Ann Kong, BIO Intelligence Service Mr. Eric Labouze, BIO Intelligence Service Ms. Christiane Gerstetter, Ecologic Institute Mr. Nils Meyer Ohlendorf, Ecologic Institute Mr. Malte Preuss, Ecologic Institute Mr. Etienne Mercier, IPSOS Ms. Emilie Rey-Coquais, IPSOS
KEY CONTACTS Shailendra Mudgal [email protected]
Or
Kurt Muehmel [email protected]
DISCLAIMER The project team does not accept any liability for any direct or indirect damage resulting from the use of this report or its content. The views expressed in this report are the sole responsibility of the authors and do not necessarily reflect the views of the European Commission. The recommendations given by the authors should not be interpreted as a political or legal signal that the Commission intends to take a given action.
Please cite this publication as: BIO Intelligence Service (2012), Study on different options for communicating environmental information for products, Final report prepared for the European Commission – DG Environment
Cover photo credit: cover @ Per Ola Wiberg
Study on different options for communicating environmental information for products | 3
Table of Contents
EXECUTIVE SUMMARY 7
INTRODUCTION 13
CHAPTER 1: COMMUNICATING ENVIRONMENTAL INFORMATION TO CONSUMERS 15
1.1 The challenges of communicating environmental information to consumers 15
1.2 What multi-criteria information to communicate 16
1.2.1 Number of indicators 16
1.2.2 Level of aggregation 17
1.3 How to communicate multi-criteria environmental information 18
1.3.1 Scales 18
1.3.2 Absolute values vs. ratios vs. physical values 19
1.3.3 Colour coded systems 20
1.3.4 Smartphone systems 21
1.4 Where to communicate 22
1.5 Summary of literature review findings and implications for consumer survey 23
CHAPTER 2: METHODOLOGY OF CONSUMER SURVEY 25
2.1 Design of options 25
2.2 Focus group 27
2.2.1 Structure and organisation 27
2.2.2 Key findings 28
2.3 Refinement 29
2.4 Development of survey 31
CHAPTER 3: RESULTS OF CONSUMER SURVEY 33
3.1 Demographic information on survey participants 33
3.2 Consumer understanding of product environmental information 34
3.3 Consumer expectations for product environmental information 37
3.4 Summary of key findings 38
3.5 Selection of most optimal design options 40
CHAPTER 4: LEGAL CONSIDERATIONS 41
4.1 Applicable WTO Agreements 42
4.1.1 Agreement on Technical Barriers to Trade (TBT) 43
4.1.2 GATT 53
4.2 Recommendations to avoid WTO inconsistency of environmental labels 53
4 | Study on different options for communicating environmental information for products
List of Tables
Table 1: List of communication supports 22
Table 2: Demographic information of survey participants 34
Table 3: Quantitative summary of questions on understanding of environmental impact and
where information should be located 35
Table 4: Quantitative summary of how helpful the label is in purchasing decision 37
Table 5: ISO standards relevant for environmental labelling 49
Study on different options for communicating environmental information for products | 5
List of Figures
Figure 1: Single score on packaging: Casino, using multi-criteria information 18
Figure 2: Theoretical multi-score food label, using multi-criteria environmental information 18
Figure 3: Aspects of environmental display methods that consumers disliked (Ernst & Young,
2009) 20
Figure 4: Aspects of environmental display methods that consumers preferred (Ernst & Young,
2009) 20
Figure 5: Example of traffic light nutritional labelling (Faculty of Public Health, 2008) 21
Figure 6: Smartphone application, “Good Guide” 22
Figure 7: Example of early designs prior to revision 25
Figure 8: Designs tested via the focus group 26
Figure 9: Design 4 translated into Italian, Polish and Swedish 27
Figure 10: Refined designs tested in the quantitative survey 30
Figure 11: Example of question designed to test consumers’ understanding of environmental
information when presented via different designs 31
Figure 12: The four labels tested (tested versions were translated to local languages) 36
Figure 13: Optimised label designs 40
6 | Study on different options for communicating environmental information for products
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Executive summary
Study on different options for communicating environmental information for products | 7
Executive summary
Introduction
In 2012, the European Commission will review its Sustainable Consumption and Production
Industrial Policy (SCP/SIP) Action Plan, which was adopted in 2008. Issues related to sustainable
consumption and behaviour will be a major aspect for the 2012 review. In particular, the
possibility to provide information on the environmental performance of products that would be
comprehensive and reliable is one of the possible initiatives on product environmental
footprinting (PEF). Against this backdrop, the European Commission – DG Environment
launched this study “Different options for Communicating Environmental Information for
Products”.
The aim of this study is to review and analyse the existing knowledge on different means to
provide to final consumers multi-criteria environmental information related to products. The
overall objective is to examine different mechanisms and vehicles for communicating product-
level environmental information to consumers in order to determine what mechanisms will
maximise consumers' usage, understanding and ability to compare between different
substitutes.
In particular, this project focussed on the following aspects:
What to communicate (i.e. how many different indicators can a consumer realistically
be willing to check and be able to understand and compare?)
How to communicate the information (i.e. using what sorts of formats: figures, grades,
scaling systems, aggregated indicators, best in class label).
Where to communicate the information (e.g. shelf-tag, package, bar code)
Based on the findings of the literature review, different designs for communicating
environmental information were developed. The designs were tested through focus groups in
three target countries (Italy, Sweden, and Poland) on the basis of which the designs were further
refined. The final designs were presented to 500 participants in each of the three target countries
(i.e. 1,500 total respondents) via an online questionnaire. The results of the consumer survey
helped in identifying the optimal design options.
Key findings of the literature review
What to communicate:
Too many environmentally indicators confuse consumers, therefore
no more than three indicators should be communicated.
Food and drink products, household cleaning products, and clothing
are fast moving consumer goods that most consumers purchase
quickly and without in-depth reflection. Therefore, the level of
aggregation is a key consideration. Higher degrees of aggregation are
quicker to take in and take up less space, but are less transparent.
Executive summary
8 | Study on different options for communicating environmental information for products
Greater disaggregation can take the information beyond three
indicators, and risk being difficult for the consumer to understand.
The use of an aggregated indicator, combined with up to three
individual indicators, is recommended as an effective presentation of
data.
How to communicate:
The information should come from a trusted source and, ideally, a
third-party and not the manufacturer.
Communication over multiple channels generally has the most
positive effects. For example, information made available in a
brochure or on a website can support the more limited information
made available via an on-product label.
Using smartphone technology to communicate environmental
information could allow consumers to access detailed product
information when making their purchasing decision. Obtaining real-
time purchase input will become increasingly common as consumers
become more comfortable using their phones as a shopping tool.
Providing information over a “soft” platform such as a smartphone
has the added benefit of allowing it to be updated more frequently
and at lower cost than, for example, changing the tags on a shelf of
products. Nonetheless, this technology is still developing and not all
of the population have access to smartphone or similar technology.
Therefore, such technologies remain most effective as a
complementary source of information for the time being.
The quality and clarity of information is more important that the
quantity of information as too much information inhibits decision-
making.
General terms for the indicators and simple units of measurements
using an easy to understand rating system are preferred over
technical descriptions (e.g. “climate change” is preferred over “CO2-
equivalent”).
Absolute values by themselves are not sufficient to communicate
multi-criteria environmental information to consumers. A scale
should be used.
Colour can be a strong factor to aid in comprehension, but is often
contested by manufacturers as it can be difficult to integrate into
existing packaging designs.
Where to communicate:
Information at the purchase point is necessary to impact behaviour.
Executive summary
Study on different options for communicating environmental information for products | 9
The physical constraints of the packaging influence what labelling
options are possible. For example, small electronic products have
limited opportunities for on-product information, whereas clothing
and textiles have much greater surface area available for labels,
making this type of communication easier.
Indicators of uncertainty or data reliability should be avoided on in-
store and on-product information as they can confuse consumers.
They could be presented, however, to more advanced consumers
interested in such questions via websites or other tools.
Key findings from focus group exercise
The concept of multi-criteria environmental impacts across product life cycle is
unfamiliar. In general, the participants were unfamiliar with the idea that products can
have environmental impacts across different impact categories over their entire life
cycle.
Any potential ambiguity in the design or the language can lead to confusion. Given
consumers’ low level of general knowledge on multi-criteria environmental impacts
across the life cycle, it is not surprising that any ambiguity in the design or language
can lead to confusion.
Aggregated indicators help understanding. The absence of an aggregated indicator is a
clear source of confusion for consumers.
Letter scales are deeply associated with the EU Energy Label. Scales using a letter as
an indicator of overall performance are quite familiar to consumers. They understood
quite well that an “A” product performs better than a letter lower on the scale.
Consumers have different expectations for different product groups:
With regard to food and drink, and electronics, consumers expressed
an understanding of certain impacts associated with these products.
Understanding of environmental impact was closely entwined with
nutritional and health concerns (in the case of food and drink) and
energy use and the related cost (in the case of electronics).
For household cleaning supplies, consumers expressed an
understanding of the potential for harm associated with toxic or
hazardous products.
In the case of clothing, participants suggested a simplified label, like
the EU Ecolabel, to indicate if the product is “environmentally-
friendly” or not.
Quantitative indicators are of mixed value. For some consumers — in particular, senior
citizens — the presence of quantitative figures cast doubt on their understanding of
the label. Other consumers — in particular, younger generations— expressed an
appreciation for the indicators, saying that it increased their confidence in the accuracy
of the label, even if they did not understand exactly what the numbers meant.
Executive summary
10 | Study on different options for communicating environmental information for products
Key findings from consumer survey
The follow four designs were translated to the local languages and then used in the survey.
Consumers express a desire for environmental information, but only about half look for
it. The information therefore needs to be obvious (impossible to miss) and explicit
(impossible to misunderstand).
Consumers think differently about different categories of products:
Connect environmental impact to human health (food, cosmetics)
Strong understanding of energy use (brown goods, electronics)
Understanding of toxicity (cleaning supplies)
A strong case can be made for the use of normative (or qualitative) language when
communicating environmental information. This means using “Better” or “Worse”
instead of the purely factual “Less impact” or “More impact”.
Aggregated indicators are considered very helpful by consumers, though they do
introduce significant technical and policy challenges to the process.
Consumers expect the relevant information to be available at their point of decision.
This would generally mean on the product or shelf. For most products, consumers are
unlikely to be willing to look up a product on a smartphone or to visit a website in order
to inform their decision. Such media, however, could be useful places to present
supporting information (e.g. methodology used, explanation of the indicator), that
would seek to increase consumer understanding and trust in the label.
Executive summary
Study on different options for communicating environmental information for products | 11
Overall, the results of the consumer surveys indicate that there were few differences
among the three MS tested. Results of the consumer surveys carried out in the context
of this study also closely correspond to a recent consumer survey carried out in France.
Results from both surveys emphasise:
The importance of having a global aggregated indicator that allows
for easy comparison amongst products
The importance of a colour coded scheme to facilitate quicker
understanding of the information
The importance of the information verified by an independent party
Consumers prefer ranking systems using letters, rather than just the
technical environmental indicators
Selected design options
Three design options were selected based on the results of the focus group and the consumer
survey. From this basis, the designs below were proposed as having the optimal combination of
elements, based on the parameters explored in this study.
Optimised label designs
Executive summary
12 | Study on different options for communicating environmental information for products
The main changes to the designs are as follows:
The addition of coloured indicators for the disaggregated impact categories in Designs
1 and 2.
The addition of a URL1 in all designs.
The addition of quantitative data to Design 2 and the removal of quantitative data
from Design 3.
Guidelines on legal aspects
The following guidelines legal aspects have been developed with the selected design options in
mind:
EU legislation on environmental labelling must not be discriminatory, i.e. it should not
make any de jure or de facto difference between imported and domestic products.
The EU’s legislation should clearly refer to the environmental objectives of the
measure. It should avoid any reference or statements that could be read as implying
that environmental information rules serve to protect the internal market.
The EU should have sound arguments for why the environmental labelling rules chosen
are the least trade-restrictive measures conceivable for the objective it pursues. For
this, the EU must be able to show that there are no alternative, less trade-restrictive
measures available that are equally effective in reaching the desired aim (e.g. general
information campaigns).
The EU will likely need to base any labelling initiative on established ISO standards.
However, there are also some factors that are, in principle, unlikely to affect the WTO
compatibility of a label. These include:
Its design;
Which and what types of PPM-related environmental information are included in the
label (e.g. CO2 emissions and information on other air pollution, or only information on
one of them), as long as for each type of information, certain conditions (e.g., non-
discrimination, proportionality) are met;
Whether third party verification is used;
Whether the label is voluntary or mandatory; and
Whether the Commission proposes a Directive or a Regulation.
1 The URL, www.eco-impact.eu, is for illustrative purposes only.
Introduction
Study on different options for communicating environmental information for products | 13
Introduction
This report serves as the final deliverable for the “Study on different options for Product’s
Environmental Information Communication”. The study was launched by the European
Commission – DG Environment and carried out by BIO Intelligence Service with support from
IPSOS and Ecologic Institute.
The EU plans to review its Sustainable Consumption and Production and Sustainable Industrial
Policy (SCP/SIP) Action Plan in 2012. The Action Plan was adopted in 2008 with the aim of
improving the environmental performance of products and increasing the uptake of more
sustainable goods and production technologies.
The Action Plan also includes tools such as the EU Ecolabel and the EU energy label which help to
inform consumers about the environmental impacts and performance of products. The reasoning
behind information provision is that if consumers have access to the right information, they will
make more sustainable purchasing decisions. However, recent studies have revealed that
consumers are often overwhelmed with information and rarely search out, read or properly
digest all of the information available to them when making a decision. Therefore, provision of
usable information, from the perspective of the consumer, is crucial in order to ensure that tools
and initiatives are well directed and effective. The option of disclosing product environmental
information as a policy tool needs to be assessed against consumers' ability to fully understand
the information, as highlighted by the outcomes of the recent Consumer Empowerment Survey.
In this context, this study aimed to examine different mechanisms and vehicles for
communicating product-level environmental information to consumers, to determine which
mechanisms will maximise consumers' usage, understanding and ability to compare between
different substitutes. The study’s findings are largely based on an in-depth literature review, legal
analysis, and results of the consumer survey that was carried out.
Chapter 1 provides an assessment on communicating environmental information to consumers
based on existing literature.
Chapter 2 provides details on the methodology used to conduct the consumer surveys on
environmental information that were carried out in three MS.
Chapter 3 provides a detailed assessment on the results of the consumer survey. Based on the
results of the consumer survey, recommendations on the most optimal design options for
communicating environmental information to consumers are also provided.
Finally, chapter 4 provides an analysis on the legal implications of communicating environmental
information is also provided.
The Annex of this report includes supporting information on the different design options
developed.
Introduction
14 | Study on different options for communicating environmental information for products
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Chapter 1 : Communicating environmental information to consumers
Study on different options for communicating environmental information for products | 15
Chapter 1: Communicating environmental
information to consumers
This chapter provides a detailed assessment of the challenges and effective strategies—including
what information to communicate, how to communicate, and where to communicate it. The
findings of this chapter are based on an in-depth literature review.
In particular, the information presented in this chapter was used to develop the designs that were
tested during the consumer survey, in terms of how to present multi-criteria environmental
information for products.
1.1 The challenges of communicating environmental
information to consumers
The rationale behind communicating environmental information to consumers is to induce
behavioural change so that they make smarter, more sustainable consumption decisions. In
order to make consumers decide to change their behaviour, three conditions have to be met:
Adequate knowledge has to be available;
Positive attitude to change; and
Access to sufficiently attractive alternatives (infrastructure, goods) (OECD, 2002)
The scope of this study was linked to the first point listed above—concerning adequate
knowledge for consumers. Governments have often used social instruments (including
awareness raising campaigns, education, product information) to influence consumer
knowledge. Across many areas of consumer related policy, the provision of information is
favoured as a policy tool because of its lower cost compared to other policy tools and because it
is assumed that too much information can never be harmful (PSI, 2009). However, both
marketing and the behavioural sciences have shown that this is not always the case. There is vast
environmental information available for consumers; however, consumers are often reported to
complain about a lack of information. Moreover, consumers rarely search out, read or properly
digest all of the information that is available to them when making a decision. The type,
complexity and amount of information provided, and the way in which it is presented, all have a
significant impact on the likelihood of people reading and understanding it (PSI, 2009).
Consequently, the problem goes beyond just the quantity of the information, but also includes
the quality of information. Therefore, a challenge for policy makers is to identify the relevant
environmental information and make sure that it is communicated in a way that will affect the
purchasing decisions of consumers. When looking to communicate multi-criteria environmental
information, the task is particularly challenging, as a balance must be found between the
technical accuracy of an indicator and how easily it can be communicated.
Chapter 1 : Communicating environmental information to consumers
16 | Study on different options for communicating environmental information for products
While the relevant indicators vary between different product categories, using a consistent logic2
in the presentation of the information across product groups can make it easier for consumers to
understand the information over time. Additionally, policy makers should also consider the value
of building a “brand” around the environmental information displayed across products. This will
have the benefit of increasing trust and familiarity with the information across all products.
Finally, another challenge that policymakers must take into account concerns the legal basis of
environmental information communication. The World Trade Organisation (WTO) consistency of
environmental labelling, including product labels containing environmental information directed
at consumers, has received much attention in the legal debate. Therefore, policy makers need to
be able to determine whether under EU law, Member State actions concerning environmental
consumer information does not interfere with international trade rules. In general, Member
States could take unilateral measures on environmental information, provided these measures
are proportional to the environmental objective pursued, i.e. they must be (factually) suitable to
reaching the desired objective and there must not be any less-restrictive measure through which
that objective could be also achieved.
1.2 What multi-criteria information to communicate
Information must be clear and simple for consumers to understand, while simultaneously
sufficient to help consumers to make an informed purchasing decision. Aspects related to the
type and number of indicators as well as the comparability of environmental information is
discussed in this section.
1.2.1 Number of indicators
When providing detailed information to consumers, it is important to find the balance between
providing sufficient information to respond to their needs, without the quantity of information
becoming overwhelming. A review of existing methods for communicating environmental
information points to the use of approximately three environmental indicators as being
appropriate.
Several studies support the fact that consumers are often overwhelmed by the abundance and
multitude of environmental information on labels. For example, one study indicates that
Information-processing theories suggest that there is a limit to the amount of information
humans can absorb during a specific period of time (Norm, Borin et al., 2011). When consumers
have more information, satisfaction increases, however decision-making abilities decrease.
Another source aimed at businesses explains that shoppers in the UK, Europe and the US are
increasingly inundated with information about what different labels stand for, what issues they
cover and whether they can be trusted (BSR, 2008). When asked, consumers say they want to
know more about the products they buy. However, consumers are often locked into different
2 For example, if a larger value is used to indicate greater environmental impact for one product category, larger values
should also be used for the other product categories.
Chapter 1 : Communicating environmental information to consumers
Study on different options for communicating environmental information for products | 17
consumption patterns through habit, price, and access to different shops and goods. Therefore,
additional environmental information may well be over-looked given the many other competing
demands and messages. The French national experimentation3 on displaying environmental
information found that having too many indicators would create confusion and incomprehension
by consumers.
1.2.2 Level of aggregation
Food and drink products, as well as household cleaning products, and clothing are fast moving
consumer goods, meaning that they are products sold quickly and at relatively low cost.
Consumer electronics can be considered durable consumer goods or hard goods because they do
not quickly wear out, and yields utility over time rather than being completely consumed in one
use and are usually more expensive than fast moving consumer goods. Therefore, consumers will
generally spend more time considering the purchase of durable consumer goods compared to
fast moving consumer goods. This has several implications in terms of how environmental
information should be best communicated.
For food and drink products, Figure 1 and Figure 2 below show the examples of two labels that
communicate multi-criteria environmental information for food products. The difference
between the two labels is that the label in Figure 1 uses single scoring (based on the average
score of several different environmental indicators) and is currently in implementation, whereas
Figure 2 communicates multi-scores and is only a theoretical example.
As most consumers purchase fast moving consumer goods quickly and without in-depth
reflection, it would be safe to assume that consumers do not spend a lot of time deciding which
food products to purchase. However, the risk of using a single denomination to communicate the
environmental performance of the product is that consumers will misinterpret the information
provided (i.e. by not understanding what environmental indicators were used for the score or to
what extent each indicator affected the final score, etc.). This is especially the case if the
consumer does not seek the additional information provided by the website.
The level of aggregation is therefore a key consideration—higher degrees of aggregation are
quicker to take in and take up less space, but are less transparent. Greater disaggregation can
take the information beyond three indicators, and risk being difficult for the consumer to
understand. Based on the literature review findings, it is suggested to test a fully aggregated
indicator against a hybrid design, combining an aggregated indicator with up to three
disaggregated indicators.
3 The French Ministry of the Environment is currently running the French national experimentation on the display of
environmental information. It is expected that this preliminary large-scale testing will provide valuable feedback on optimizing conditions for environmental labelling in France thanks to the variety of stakeholders and sectors covered by the experimentation.
Chapter 1 : Communicating environmental information to consumers
18 | Study on different options for communicating environmental information for products
Figure 1: Single score on packaging:
Casino, using multi-criteria
information4
Figure 2: Theoretical multi-score food label,
using multi-criteria environmental information5
1.3 How to communicate multi-criteria environmental
information
Several different means and formats of communication can be used for different products. The
design and physical appearance of the information can play a key role in terms of influencing the
purchasing decision of consumers.
1.3.1 Scales
Labels that present the performance of a product on a comparative scale such as stars, letters or
numbers, or a colour coding system are vastly preferred and are more easily understood and
motivating than those that present technical information only. The use of a scaling system to
display environmental information and performance enable consumers to rank and compare
environmental performance between products. This facilitates their understanding of
environmental impacts, which would hopefully then influence their purchasing decision. Scaling
4 Casino Environmental Index label
5 Jeremy Faludi and Dawn Danby, www.worldchanging.com/archives/007256.html
Chapter 1 : Communicating environmental information to consumers
Study on different options for communicating environmental information for products | 19
systems can be in the form of letters (A, B, C, etc.), which is used on the EU Energy Label,
Numbers (9/10), Forms (star ranking), etc.
From the literature reviewed, there seems to be a consensus that, even if absolute values are
used, they should be put on a scale. Given this consensus, the use of absolute values against a
scale was not tested in the consumer survey.
1.3.2 Absolute values vs. ratios vs. physical values
In addition to the use of a scaling system to enable consumers to compare environmental
performance across products, the way units and values are expressed can positively or negatively
affect consumer understanding. A study was recently carried out in France to determine
consumer preference on different display and communication methods of environmental
information. It covered the following aspects:
Wording of the indicator: specific (ex: CO2 emissions) or general (ex: climate)
Unit of the indicator: physical value (ex: 100 g co2), score (ex: A, B, C...) or ratio (ex. %
of daily environment footprint of a European)
Visual presentation: tabular form, histogram—bar chart, or radar
The presence of a global (aggregated score)
Mention or absence of an independent verifier (Ernst & Young, 2009)
The results of the study were based on an actual consumer survey of more than 300 consumers.
Results of the study indicate that physical values are considered too technical for consumers and
most consumers tested prefer the unit of measure of a letter rating form (i.e. A,B,C). This
corresponds to the idea that consumers want to be able to easily compare the performances of
different products. In addition, consumers favour visual markers, and in particular signs they are
already familiar with (e.g. the EU energy label). In addition, among two similar labelling
initiatives, consumers prefer information verified by an independent organisation. Overall,
consumers reject technical labelling and prefer comparable information, using an easy to
understand rating system. Figure 3 and Figure 4 below show the results of the consumer
preferences study. Studies have concluded that absolute values alone are not sufficient to
communicate multi-criteria environmental information to consumers and that a scale should be
used.
Chapter 1 : Communicating environmental information to consumers
20 | Study on different options for communicating environmental information for products
Environmental impacts
CO2 emissions 7,501 g CO2-EQ
Toxicity 1,028 kg DCBEQ
Raw material 15 g antimonyEQ
# 2 Weakness: Absence of a global score
# 1 Weakness: Unit of measureexpressed as a physical value
# 3 Weakness: Presentation of information in tabular form
# 5 Weakness: Specific wording
# 4 Weakness: Absence of independent information
Figure 3: Aspects of environmental display methods that consumers disliked (Ernst & Young,
2009)
Environmental impacts
Wildlife
Resources
Climate
Verified by an independent organisation
Global score
E
G
C
D
# 2 Priority : Presence of a global score
# 1 Priority: Unit of measureexpressed as a letter
# 3 Priority: Expressed visually as
a histogram
# 4 Priority: Independent
verification
# 5 Priority: General wording
used
Figure 4: Aspects of environmental display methods that consumers preferred (Ernst &
Young, 2009)
1.3.3 Colour coded systems
The advantage of using colours as opposed to numbers and percentages is that this method
would reach a larger population (i.e. illiterate consumers would be able to easier interpret a
colour coded system). In recent years, much work has been carried out on nutrition labelling for
food. Although not the focus of this study, much can be learned from the findings from these
efforts. Findings from various studies show that in Europe, the traffic light colour scale is widely
used and easily understandable by consumers, so that it does not require a legend (see Figure 5
below for an example).
Chapter 1 : Communicating environmental information to consumers
Study on different options for communicating environmental information for products | 21
Figure 5: Example of traffic light nutritional labelling (Faculty of Public Health, 2008)
In a recent article on the colour coding for EU nutritional labels, Monique Goyens, director
general of BEUC, the European consumers' organisation, said that, "Research from across Europe
has told us that consumers find colour coding the easiest and simplest way to make informed and
healthy choices (Banks, Martin, 2010).”
A challenge for colour-coded systems is integration with existing packaging designs.
Manufacturers may be more likely to oppose a label that includes colours that do not “go well’
with their design.
Given that colour seems to be an important variable to include in any future design, but which
may be opposed by manufacturers, it could be useful to have evidence to show that colour is or is
not an important variable to include.
1.3.4 Smartphone systems
Recent market data indicates that obtaining real-time purchase input will become increasingly
common as consumers become more comfortable using their phones as a shopping tool
(Microsoft Advertising, 2010).The advantages of using smartphone technology to communicate
environmental information (as opposed to more classical methods such as labels and in-store
displays) is that it is innovative and allows consumers to access complete information about the
product on the spot. Being able to scan just the product barcode or flashcode for environmental
information, rather than placing a label directly on the product or packaging could be particularly
important for products that have limited space for labels. Nonetheless, there is also the risk that
using this type of communication tool will not be accessible to the portion of the population that
do not have access to smartphone or similar technology. This vision was also supported by a
consortium of consumers’ associations, who felt that the use of digital technologies to
communicate information should be used only as an additional support feature for information
on-pack or on-shelves (Ademe, 2011).
Much attention has been given to smartphone-based systems, yet no evidence has been found to
prove their effectiveness. Testing the presence and absence of a smartphone link could provide
interesting information into the usefulness of such technology.
See Figure 6 for an example of an application that communicates environmental information
used with smart phone applications.
Chapter 1 : Communicating environmental information to consumers
22 | Study on different options for communicating environmental information for products
Figure 6: Smartphone application, “Good Guide”6
1.4 Where to communicate
There is a wide range of possible channels by which the information can be communicated. They
are summarised in Table 1.
Table 1: List of communication supports
Means and Channels
At the point of sale
On-pack : all the information is given on the packaging
On-shelf: all the information is provided at the shelf where the product is situated
Price terminal (with bar code), 2D code/tag + decoding device, bar code or 2D code/tag reading with cell phone (smartphone)
Close to the point of sale
Leaflet: informative document available in store
Receipt: Information provided on the till receipt
Representative in shops: store-employed resource or brand representative in-store during a promotion
In-store signage and advertising : backer cards, display cartons, posters, floor decals and ceiling hangers etc.
Beyond the Point of Sale
Public Relations: field concerned with maintaining a public image for organizations
Marketing Campaigns through television, radio, print, online
Advertising: the purchase of advertising time / space for a company or brand through a variety of media channels
Internet/Social Media through social networks, blogs, company websites, etc.
According to the European Food SCP Round Table, the main conclusions on where information
should be communicated in the case of food and drink are (European Food Roundtable, 2011):
6 www.goodguide.com
Chapter 1 : Communicating environmental information to consumers
Study on different options for communicating environmental information for products | 23
A simple message combined with a web URL or a QR/2-dimensional code on pack
allowing consumers to get more information from a website or an application
On-shelf communication seems useful for products sold without packaging such as
vegetables.
Receipts provided at the till are not suitable since consumer’s purchasing is not directly
impacted by the information displayed
For brown goods, research shows that due to technical information and the relatively small
packaging space offered by brown goods, communicating environmental information would be
most effective through a combination of different channels, such as in store displays, coupled
with smartphone applications that could provide more complete information.
A study on the environmental labelling of clothing indicates that consumers prefer information
attached to products and labels (Koszewska M., 2011). The real life examples reviewed of
clothing labels correspond with this conclusion. In all of the cases, environmental information is
placed directly on the clothing product.
Based on the literature reviewed, it seems clear that information must be provided at the point of
purchase. Testing the impact of the presence/absence of a smartphone code (see section 1.3.4
above) could also serve as a test of the “belief” that additional information is available beyond
the point of purchase, even if the consumer does not access it. As on-product or on-shelf
information will be a required component of any future design, it was recommended to focus the
experimental resources of this study on this area.
1.5 Summary of literature review findings and
implications for consumer survey
Overall, there is a lack of experimental data quantifying the impact of different presentations of
environmental data. Nonetheless, conclusions can be drawn from the approaches taken in
existing initiatives to test and present multi-criteria environmental information. In particular, the
ongoing French experimentation will likely be a source of interesting information for the
Commission’s future efforts in this arena.
Following are some key findings to guide the methodology and designs tested in the consumer
survey:
What to communicate
A review of existing methods for communicating environmental information point to
the use of approximately 3 indicators.
Chapter 1 : Communicating environmental information to consumers
24 | Study on different options for communicating environmental information for products
How to communicate
To make comparisons between multiple products, consumers prefer a single,
aggregated metric in place of multiple, individual metrics;
The information should come from a trusted source and, ideally, a third-party and not
the manufacturer;
Communication over multiple channels generally has the most positive effects. For
example, information made available in a brochure or on a website can support the
more limited information made available on an on-product label;
Quality of information is more important that the quantity of information as too much
information inhibits decision-making; and
Physical values are considered too technical for consumers and most consumers prefer
simpler units of measurements using an easy to understand rating system. Consumers
favour visual markers, and in particular signs they are already familiar with (e.g. the EU
energy label).
Where to communicate
The physical constraints of the packaging of small electronic products limits the
opportunities for on-product information, whereas in the case of clothing and textiles,
the greater surface area and the ease with which labels and stickers can be attached
makes this type of communication easier.
From the above observations, the following conclusions can be made in terms of the implications
for the consumer survey:
The combination of an aggregated indicator, with up to three individual indicators, has
been recommended as an effective presentation of data.
More than three indicators are likely to confuse consumers.
Links to additional information (generally via a website) tend to increase consumer
confidence in the information, even if the consumer does not access the information.
Colour can be a strong factor, but is often contested by manufacturers as it can be
difficult to integrate into existing packaging designs.
Information at the purchase point is necessary to impact behaviour.
General terms for the indicators are preferred over technical descriptions (e.g. “climate
change” is preferred over “CO2-equivalent”)
Indicators of uncertainty or data reliability should be avoided on in-store and on-
product information. They could be presented, however, to more advanced consumers
interested in such questions via websites or other tools.
Chapter 2 : Methodology of consumer survey
Study on different options for communicating environmental information for products | 25
Chapter 2: Methodology of consumer survey
The primary objective of the survey was to quantify, insofar as possible, consumer understanding
and perception of different visual presentations of multi-criteria environmental data on different
groups of products. Based on the initial research into existing approaches of communicating
single- and multi-criteria environmental information, the following iterative approach was used
to produce and refine the designs.
1. A number of different designs7 were developed and then refined, following discussion
and input from the Commission.
2. The refined designs were translated and presented to focus groups in the three target
countries (Italy, Sweden, and Poland), and their feedback was collected.
3. The designs were revised based on this feedback, and further refined following additional
discussion and input from the Commission.
4. The final set of designs were produced, translated and presented to 500 participants in
each of the three target countries (i.e. 1,500 total respondents) via an online
questionnaire.
2.1 Design of options
The initial design phase allowed different approaches to be explored. These designed ranged
from simple (e.g. a single letter) to complex (e.g. a spider diagram) representations of the data.
Emphasis was made to produce simple and clear labels that would allow the main design
elements — such as the letters or other symbols used to signify environmental impact — to be
the subject of the survey, and not incidental design elements. Figure 7 shows some examples of
this early design phase.
Figure 7: Example of early designs prior to revision
Following discussion with the Commission, the designs were refined and final versions were
prepared for the focus groups. The six designs tested are shown in Figure 8.
7 For examples of these designs, please see the Annex.
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26 | Study on different options for communicating environmental information for products
Figure 8: Designs tested via the focus group
The motivation for testing the designs in Figure 8 was as follows:
Designs 1 and 2 would allow the presence or absence of a 2-dimensional bar code to be
discussed in the focus group.
Designs 3 and 4 would allow the presence or absence of an aggregated indicator to be
discussed in the focus group.
Chapter 2 : Methodology of consumer survey
Study on different options for communicating environmental information for products | 27
Designs 4 and 5 would allow the use of quantitative disaggregated indicators to be
discussed.8
Designs 4 and 6 would allow the use of stars in the place of letters to be discussed.
In order to guide the discussions in the focus groups, a script was prepared for the group
facilitators. This script divided the discussion into two main sections. The first section explored
the participants’ understanding of terms such as “environmental label” and their existing
motivation to seek low-impact products. The second section discussed the designs specifically.
Once finalised, the script and the label designs were then translated into the national languages
of the test countries. Figure 9 shows the translated versions of Design 4, as an example.
Figure 9: Design 4 translated into Italian, Polish and Swedish
2.2 Focus group
2.2.1 Structure and organisation
One focus group was organised in each of the target countries. Each focus group consisted of 8
participants. These participants were a mix of men and women, aged from 25 to 60 years old,
coming from the lower and middle socio-economic classes. The participants were also identified
as being the person regularly in charge of household purchases. A moderator was present to
guide the focus groups, as was a note-taker to record the comments and reactions of the
participants.
The moderators led the groups through the exercise using a script. General information was
collected on the participants’ buying habits, as well as their reactions to the designs. The designs
were also considered in the context of four different product groups, namely clothing, food and
drink, electronics, and household cleaning supplies. The participants were also asked to provide
suggestions for improving the designs.
8 The quantitative values used were fictitious and do not correspond to any particular product. The values were chosen
in such a way to show different units with large differences between the nominal values in the hopes of testing the possibility of consumer confusion.
Chapter 2 : Methodology of consumer survey
28 | Study on different options for communicating environmental information for products
2.2.2 Key findings
The reactions and comments of the focus group participants were summarised and aggregated.
The main finds are presented below. It is important to keep in mind, however, that this
qualitative feedback is the coming from a small sample and is thus not necessarily representative
of European consumers more generally. That said, the goal of this exercise was to obtain
feedback on the initial designs, so as to improve them before launching the quantitative study.
Concept of multi-criteria environmental impacts across product life cycles is
unfamiliar
Broadly speaking, the participants were unfamiliar with the idea that products can have
environmental impacts across different impact categories over their entire life cycle.
One source of the confusion was the fact that understood that some products could have
specific impacts associated with certain life-cycle phases. For example, some participants
expressed an understanding of the GHG emissions associated with the energy consumed in
the use phase of electrical products, or the toxicity impacts associated with the disposal of
household cleaning supplies.
Some participants, however, expressed surprise and confusion when presented with the
idea that a cleaning product could have caused GHG emissions before it is used.9
Any potential ambiguity in the design or the language can lead to confusion
Given consumers’ low level of general knowledge on multi-criteria environmental impacts
across the life cycle, it is not surprising that any ambiguity in the design or language can lead
to confusion. In particular, the participants noted the following:
The term “Environmental score” would be more easily understood than
“Environmental index”.
Normative terms such as “better” or “worse”, which serve to guide the consumers
action, are more easily understood than purely factual terms like “less impact” and
“more impact”.
Using symbols like stars (as in Design 6) can lead to confusion as the meaning of
more or less stars can be ambiguous.10
Aggregated indicators help understanding
The absence of an aggregated indicator is a clear source of confusion for consumers. When
presented with Design 3, they noted that a consumer would need to understand the issues
of global warming, air pollution and water pollution to be able to make a judgment on the
overall impact of a product, and thus influence their purchasing behaviour.
9 Such impacts would, in principle, be associated with its production and transportation life-cycle phases.
10 Questions were raised such as, “Are more or less stars preferable?” More stars could be understood as meaning
“more impact” and therefore worse, or could be understood as meaning “a better choice” (as is the case in other contexts, such as online retailers).
Chapter 2 : Methodology of consumer survey
Study on different options for communicating environmental information for products | 29
Letter scales are deeply associated with the Energy Label
Scales using a letter as an indicator of overall performance were quite familiar to the
consumers. They understood quite well that an “A” product performs better than a letter
lower on the scale.
Consumers have different expectations for different product groups
Consumers expressed clear opinions about the appropriateness of different labels and
impact categories for different product groups. These opinions may be the result of a
superficial understanding of the environmental impact associated with products.
With regard to food and drink, and electronics, consumers expressed an understanding of
certain impacts associated with these products. That said, the understanding of
environmental impact was closely entwined with nutritional and health concerns (in the case
of food and drink) and energy use and the related cost (in the case of electronics).
In the case of household cleaning supplies, consumers expressed an understanding of the
potential for harm associated with toxic or hazardous products, but did not feel that the
designs as they were presented communicated this clearly.
Finally, in the case of clothing, the participants stated that none of the designs seemed
appropriate for them and suggested a simplified label, like the EU Ecolabel, to indicate if the
product is “environmentally-friendly” or not.
Quantitative indicators are of mixed value
Finally, the presence of quantitative indicators and their associated units is of mixed value.
Some consumers — in particular, senior consumers — expressed confusion when presented
Design 5. For them, the presence of such numbers cast doubt on their understanding of the
label. At the same time, other consumers — in particular, younger generation consumers —
expressed an appreciation for the indicators, saying that it increased their confidence in the
accuracy of the label, even if they did not understand exactly what the numbers meant.
2.3 Refinement
Based on results of the focus group and further discussion with the Commission, the designs
were refined. In order to explore each design in more detail, the total number of designs was
limited to four. The four designs as they were tested are presented in Figure 10.
Chapter 2 : Methodology of consumer survey
30 | Study on different options for communicating environmental information for products
Figure 10: Refined designs tested in the quantitative survey
The following general changes were made to the designs:
The title of the label was changed to “Environmental impact” instead of
“Environmental index”, and was moved to the top of the label.
The phrase, “This rating has been verified by independent experts and is based on this
product’s contribution to: [relevant disaggregated indicators]” was added to encourage
confidence in the data and methodology supporting the label.
The colour and layout of the labels was simplified.
The motivation for testing the specific designs in Figure 10 is as follows:
Designs 1 and 3 would test the impact of the “slider” design as compared to the letter
scale.
Designs 2 and 3 would test the impact of the presence or absence of quantitative
disaggregated indicators.
Designs 3 and 4 would test the impact of the presence or absence of a two-dimensional
bar code.
Chapter 2 : Methodology of consumer survey
Study on different options for communicating environmental information for products | 31
A questionnaire was then developed to present the designs to the survey participants. The goal
of this questionnaire was to collect their feedback on the designs and to test their understanding
of the environmental information presented on the designs.
2.4 Development of survey
The survey was constructed with several sections that were presented in the following order:
Introductory questions to measure the respondents pre-disposition towards
environmental issues;
Questions aiming to test the label’s ability to communicate environmental
information, which presented the same label design on two similar products, each with
a different level of environmental impact, and asking the participant to choose the
product with the lower impact (see Figure 11 for an example);
Questions asking participants to rate each design across several different metrics (e.g.
clarity and ease of understanding);
Questions asking the participants whether they consider environmental impacts when
purchasing products of different types; and
A question asking if the participants are favourable or not to environmental labelling.
Figure 11: Example of question designed to test consumers’ understanding of environmental
information when presented via different designs
The translated questionnaires and designs were then presented to 500 participants in each of the
three target countries via an online survey, providing the 1,500 total responses. The results were
automatically collated and a statistical analysis was performed to identify the underlying trends.
Chapter 2 : Methodology of consumer survey
32 | Study on different options for communicating environmental information for products
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Chapter 3 : Results of consumer survey
Study on different options for communicating environmental information for products | 33
Chapter 3: Results of consumer survey
Based on the results of the focus group described above, a consumer survey was carried out to
further refine the design options. The three consumer surveys were conducted through the
IPSOS Online Access Panel. They were carried out in three different Member States (Poland,
Italy, Sweden) to gather a statistically significant base of information on the effectiveness of the
proposed designs. IPSOS’s Online Access Panel gathers more than 4 million panellists in 43
countries, covering all of the major markets in Europe, North and South America, Asia-Pacific.
This chapter presents the analysis of the results of the consumer survey.
3.1 Demographic information on survey participants
The questionnaire was administered to ensure that 500 complete responses are received in each
of the target countries, for a total of 1,500 complete responses. The survey participants were
selected to represent the national populations (in terms of gender, age, occupation, and region).
See Table 2 below, which includes detailed demographic information for the participants
surveyed. The “quotas” method was used to select the participants for the consumer survey. This
method selects a sample of people with similar socio-demographic characteristics that are
representative of the general population. The criteria used included gender, age, occupation of
the respondent, market size and region.
Chapter 3 : Results of consumer survey
34 | Study on different options for communicating environmental information for products
Table 2: Demographic information of survey participants
Demographic characteristics Number of participants
from all countries
Gender Female 749
Male 751
Age group
18-24 years 219
25-34 years 334
35-44 years 344
44-54 years 336
55 + years 268
Individual occupation
Managers and professionals 209
Technicians, clerks, service workers 399
Workers, elementary occupations, armed forces
362
Inactive/unemployed 530
Level of education
Primary / Secondary 500
Vocational 529
University 421
Main household shopper
Main shopper 1,336
Not main shopper 164
Total sample size 1,500
3.2 Consumer understanding of product
environmental information
The questionnaire’s section on consumer understanding of product environmental information
was split into two main sections. The first section asked generic questions to gauge consumers’
overall understanding of product environmental information. The second part of the
questionnaire tested consumers’ responses to specific label designs.
Results of the generic section of the questionnaire indicate that, overall, consumers seem to
understand the concept of environmental impact of products, if only superficially. Approximately
57% of respondents claim to know and understand the concept of “the environmental impact of a
product", whereas 38% have heard of the expression, although they do not really know what it
means.
In terms of where product information should be placed, the survey results show that for
consumers, information about the environmental impact should be provided on the product
itself. Thus, the majority of respondents (68%) would prefer to find this information directly
labelled on the product, rather than on the shelves next to the product (37%), on a website (21%),
Chapter 3 : Results of consumer survey
Study on different options for communicating environmental information for products | 35
on a flyer available in the store (18%), or through a mobile application (5%). Table 3 summarises
the above responses.
Table 3: Quantitative summary of questions on understanding of environmental impact and
where information should be located
Question
Responses
Yes and I know what this
means
Yes, I have heard of this expression, but I do not know
what it means
No, I have never heard of this expression
Do you understand what the
“environmental impact of a
product” means?
57% 38% 5%
Where should
product
environmental
information be
located?
As a label on the product
itself
In the store, on the shelf near the
product
On a website
On a flyer in store
On a smartphone
68% 37% 21% 18% 5%
Following this generic section, questions were asked to test consumers’ understanding of
environmental information when presented via different designs that were prepared specifically
for this study. The different labels (see Figure 11 on page 31 for an example) presented two
similar products, each with a different level of environmental impact presented with the same
design, and asking the participant to identify the product with the lower impact. The labels were
tested on three different product groups. Two of the labels included an aggregate indicator
(clearly signalling which product was “better” or “worse”), whereas the third contained only three
disaggregated indicators (thus rendering the judgement of absolute environmental impact
indeterminate). In general, the two labels with aggregate indicators showed that most
consumers (84% and 86%, in the two cases) were able to successfully identify the lower-impact
option. In the case of the label with no aggregate indicator, 75% of the respondents selected the
same option, notably the one without a single particularly low score on any of the disaggregated
indicators.
The second part of this section of the questionnaire explored consumers’ reactions to specific
label designs. Four different label designs were tested. It should be noted that there was not
significant opposition or difficulty in understanding any of the labels tested. Of the four labels
tested (see Figure 10, page 30), design 1 was the preferred choice of respondents in terms of
relevancy and helpfulness in understanding of the environmental information being
communicated (see Table 4 for detailed results).
Chapter 3 : Results of consumer survey
36 | Study on different options for communicating environmental information for products
Figure 12: The four labels tested (tested versions were translated to local languages)
With regard to design 1, the following responses were received:
The label is interesting: 91%
The label is clear: 91%
The label encourages the consumer to consider it before purchasing the product: 86%
The label is easy to understand: 88%
The label provides good information on the product’s environmental performance:
79%
Overall, the majority of respondents preferred design 1 in terms of communicating
environmental information (49%). This is compared to 32% who preferred design 2, 8% who
preferred design 3 and 11% who preferred design 4.
Design 1 stood out from the other three options on nearly all of the metrics, consistently across
the three countries. The only criterion for which design 1 was not first choice was on the aspect
related to “the label provides good information on the product’s environmental impact”.
Respondents from Sweden and Italy preferred design 2 in this case.
With these results in mind, design 1 seems to be the most efficient in terms of consumer
understanding of the information communicated. This is most likely due to not only the
Chapter 3 : Results of consumer survey
Study on different options for communicating environmental information for products | 37
qualitative and thus straightforward description of the product’s environmental performance, but
also thanks to the colour-coded system that is used in parallel. This brings further clarity and
understanding to consumers.
Table 4: Quantitative summary of how helpful the label is in purchasing decision11
To what extent is the label relevant and helpful in your purchasing decision?
Labels Response Label is
clear
Label is
interesting
Easy to
understand
information
Encourages me
to look at it
before purchase
Encourages
purchasing
decision
Provides good
info on env.
impact of
product
Design
1
Very helpful 56% 50% 51% 46% 45% 43%
Somewhat
helpful 35% 41% 37% 40% 41%
36%
Helpful % 91% 91% 88% 86% 86% 79%
Design
2
Very helpful 41% 39% 33% 37% 37% 37%
Somewhat
helpful 41% 48% 41% 44% 43%
43%
Helpful % 82% 87% 74% 81% 80% 80%
Design
3
Very helpful 40% 39% 36% 35% 35% 31%
Somewhat
helpful 45% 48% 45% 46% 47%
45%
Helpful % 85% 87% 81% 81% 82% 76%
Design
4
Very helpful 35% 36% 32% 32% 31% 28%
Somewhat
helpful 48% 48% 45% 47% 47%
47%
Helpful % 83% 84% 77% 79% 78% 75%
3.3 Consumer expectations for product
environmental information
When asked on which products they would most likely seek environmental information, the
respondents indicated food, fruits and vegetables, cosmetics, household appliances, and
11
Please note that the table only provides the responses « Very helpful » and « somewhat helpful » of the respondents. The responses « somewhat helpful » and « very unhelpful » were also a possibility
Chapter 3 : Results of consumer survey
38 | Study on different options for communicating environmental information for products
cleaning products and maintenance. The top two items for which environmental labels are
sought are food items, whereas the others have health and safety considerations. This finding
corresponds closely to what has been observed in existing literature. Consumers often link
environmental performance with health benefits, which is a very important factor in purchasing
decision.
For consumer electronics, toys, clothing, and household linen, consumers pay slightly less
attention to environmental labels, even if they remain alert to this aspect when buying. This
could be explained in part by the fact that, for items such as electronic appliances (music
systems, computers, etc.), technical performance is a usually a significant factor in purchase
decision. Similarly, for items such as clothing, textiles, and shoes, purchasing decision is very
often linked to personal preferences above all. Clothing is a way to express personal and
individual identify in society, therefore purchasing decisions are often influenced by evolving
fashion trends, rather than environmental performance.
Overall, in all three countries tested, consumer expectations for environmental labelling are real.
In these countries, 96% of respondents favour the establishment of environmental labelling—of
which 65% are very favourable. Only about 4% of respondents are strongly opposed.
3.4 Summary of key findings
Following are the main findings from the analysis of the consumer survey results and literature
review:
Consumers express a desire for environmental information, but only about half look for
it. The information therefore needs to be obvious (impossible to miss) and explicit
(impossible to misunderstand).
Consumers think differently about different categories of products:
Connect environmental impact to human health (food, cosmetics)
Strong understanding of energy use (brown goods, EEE)
Understanding of toxicity (cleaning supplies)
Generally, there is little understanding of life-cycle impacts of a product (e.g. the focus
group participants had a difficulty understanding that a product can have an impact
before the use and disposal phases)
A strong case can be made for the use of normative (or qualitative) language when
communicating environmental information. This means using “Better” or “Worse”
instead of the purely factual “Less impact” or “More impact”.
Aggregated indicators are very helpful for consumers, though they do introduce
significant technical and policy challenges to the process.
Consumers expect the relevant information to be available at their point of decision.
This would generally mean on the product or shelf. For most products, consumers are
unlikely to be willing to look up a product on a smartphone or to visit a website in order
to inform their decision. Such media, however, could be useful places to present
Chapter 3 : Results of consumer survey
Study on different options for communicating environmental information for products | 39
supporting information (e.g. methodology used, explanation of the indicator), that
would seek to increase consumer understanding and trust in the label.
Overall, the results of the consumer surveys indicate that there were few differences
among the three MS tested. Results of the consumer surveys carried out in the context
of this study also closely correspond to a recent consumer survey carried out in France
(Ernst & Young, 2009). Results from both surveys emphasise:
The importance of having a global aggregated note that allows for
easy comparison amongst products
The importance of a colour coded scheme to facilitate quicker
understanding of the information
The importance of the information verified by an independent party
Consumers prefer ranking systems using letters, rather than just the
technical environmental indicators
Chapter 3 : Results of consumer survey
40 | Study on different options for communicating environmental information for products
3.5 Selection of most optimal design options
The results of the results of the focus groups and the quantitative survey were analysed together
and were then discussed with the Commission. From this basis, the designs in Figure 13 were
proposed as having the optimal combination of elements, based on the parameters explored in
this study.
Figure 13: Optimised label designs
The main changes to the designs are as follows:
The addition of coloured indicators for the disaggregated impact categories in Designs
1 and 2.
The addition of a URL12 in all designs.
The addition of quantitative data to Design 2 and the removal of quantitative data
from Design 3.
12 The URL, www.eco-impact.eu, is for illustrative purposes only.
Chapter 4: Legal considerations
Study on different options for communicating environmental information for products | 41
Chapter 4: Legal considerations
Potential legal implications are a key aspect related to communicating environmental
information and product labels. Over the last years, the implications of WTO rules on
environmental labelling have received much attention in legal debates, particularly concerning
the labelling of genetically modified organisms. Labelling has been discussed controversially in
the WTO Committee on Technical Barriers to Trade (TBT Committee), and on 15 September 2011
a WTO panel adopted a landmark decision on environmental labelling. In this decision, the panel
ruled on a US labelling scheme that prohibited the misleading use of the term “dolphin safe” and
introduced rules on certifying tuna.13 In the case of an appeal, the WTO Appellate Body would
review and possibly repeal the panel’s decision. Despite the possibility of an appeal, the panel
decision provides important insights into how the WTO dispute settlement bodies handle
environmental labelling schemes.
The following analysis is based on this decision and a brief review of more recent literature. It
clarifies the broad lines of the WTO’s consistency on environmental labels directed at consumers
and discusses the relevant provisions of the TBT Agreement (TBT) and the General Agreement
on Tariffs and Trade (GATT). With discussions on reforming EU labelling still underway, the
analysis remains generic. We emphasise that this analysis discusses only in general terms the
WTO rules that lawmakers must observe when adopting legislation on environmental labels
directed at consumers. As the devil lies in the details, it is indispensable to scrutinise the details of
each newly proposed labelling scheme in light of applicable WTO provisions. In addition, many of
the issues discussed in this chapter have not yet been decided by the WTO dispute settlement.
Therefore, this chapter can only provide an indication of the likely position of the WTO dispute
settlement, but does not and cannot constitute a final conclusion.
This analysis focuses on the labelling of products and does not refer to the labelling of services.
Generally speaking, it is possible to categorise labelling schemes pursuant to three criteria:
Government involvement (whether the scheme is administered by public authorities or
privately sponsored);
Their legal effect (whether labelling is mandatory or voluntary); a labelling system is
regarded as mandatory when the award of the label functions as a legally binding
market access requirement; otherwise, it is classified as voluntary.14
Their scope (whether they apply to product-related characteristics only, or whether
they — also or exclusively — cover process and production methods (PPM)).
13
WTO, United States — Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, Report of the Panel, 15 September 2011, WT/DS381/R, www.wto.org/english/tratop_e/dispu_e/cases_e/ds381_e.htm
14 Vranes, Erich, 2010, Climate Labelling and the WTO - The 2010 EU Ecolabelling Programme as
a Test Case under WTO Law
Chapter 4: Legal considerations
42 | Study on different options for communicating environmental information for products
4.1 Applicable WTO Agreements
Two WTO agreements are applicable to environmental labelling: the TBT and the GATT. All 153
WTO members are parties to the GATT and TBT, which entered into force in 1947 and 1995
respectively.15
The TBT applies to technical regulations and standards. It aims at reducing (non-tariff) barriers to
trade and sets requirements for the permissibility of technical regulations and standards.
According to Annex 1.1 TBT, a technical regulation is a:
[d]ocument which lays down product characteristics or their
related processes and production methods, including the applicable administrative
provisions, with which compliance is mandatory. It may also include or deal
exclusively with terminology, symbols, packaging, marking or labelling
requirements as they apply to a product, process or production method” (emphasis
added).
According to Annex 1.2 TBT, a standard is a:
[d]ocument approved by a recognised body, that provides, for
common and repeated use, rules, guidelines or characteristics for products or related
processes and production methods, with which compliance is not mandatory. It
may also include or deal exclusively with terminology, symbols, packaging, marking
or labelling requirements as they apply to a product, process or production method”
(emphasis added).
WTO dispute settlement bodies have decided that labelling schemes fulfil these definitions, in
principle, and can thus, when mandatory, be considered a technical regulation.16 As Annex 1.1
and 1.2 TBT are worded similarly, this reasoning can be applied mutatis mutandis to voluntary
labelling schemes. In consequence, the TBT applies, in principle, to labelling schemes established
and administered by a WTO Member, irrespective of whether they are mandatory or voluntary in
nature. They are, however, subject to slightly different rules.
Moreover, there has been a controversy about whether the TBT only applies to product-related
labels, i.e. labels that describe the immediate characteristics of a certain product only (e.g. its
energy efficiency or genetic modification) or also to non-product related process and production
method (PPM) labels. Non-product related PPM-labels describe the environmental footprint of a
product during its production (e.g. carbon emissions caused during its production). Some have
argued that the TBT should be narrowly interpreted to only cover product-related environmental
15 Status of ratification: http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm, note that the GATT has
undergone significant amendments since its adoption in 1947.
16 WTO, United States — Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products,
Report of the Panel, para. 7.71 with further references.
Chapter 4: Legal considerations
Study on different options for communicating environmental information for products | 43
labels.17 However, in the recent Mexico-US Tuna case, the WTO panel has decided that the rules
on the use of the label “dolphin-safe” represented a technical regulation in line with Annex 1.1
TBT.18 As the label “dolphin-safe” relates to the way that tuna was caught (and not to its physical
properties), this implies a rejection of the above, narrow reading of the TBT as only covering
product-related standards that relate to the physical characteristics and the performance of a
product. However, it remains to be seen, what the Appellate Body will say on the matter.
The GATT, in turn, contains general rules on trade in goods. Its most relevant Article (Art. III:4,
see below) covers “all laws, regulations and requirements affecting their internal sale, offering for
sale, purchase, transportation, distribution or use.” This broad definition includes environmental
labelling schemes.
Concerning the relationship between both agreements, the Note to Annex 1A to the WTO
Agreement stipulates that the TBT Agreement shall prevail over GATT in the case of a conflict
between the two agreements. If there is no such conflict, the WTO case law so far indicates that
both the TBT and GATT are applicable to a given measure.19 Because the TBT Agreement is the
more specific agreement when it comes to labelling, a WTO dispute settlement panel would
probably first assess a labelling measure under the TBT and only after this under the GATT.20
However, this does not mean that only the TBT is applicable.
4.1.1 Agreement on Technical Barriers to Trade (TBT)
The TBT agreement contains formally different rules for mandatory and non-mandatory
legislation. For this reason, it is necessary to clarify which forms EU legislation on environmental
labelling could take and whether they would be of mandatory or voluntary character. The
following types are conceivable:
Type 1: A scheme that business actors can use, but whose use is not mandatory.
Type 2: A scheme that introduces no obligation to provide environmental information
but requires business to comply with specific requirements if they have decided to
display environmental information.
Type 3: Legislation that obliges business actors to provide certain environmental
information for certain products and makes the provision of such information a
condition for market access.
Type 1 is clearly voluntary in nature, and would thus be a “standard” according to TBT
terminology, provided that the other requirements for a standard in Annex 1, para. 2 TBT are also
fulfilled. Type 3, in turn, is clearly mandatory and therefore a “technical regulation” in TBT
17
Vranes, Erich, 2010, Climate Labelling and the WTO - The 2010 EU Ecolabelling Programme as a Test Case under WTO Law and Joshi, Manoj, 2004, Are Eco-Labels Consistent with World Trade Organization Agreements?, Journal of World Trade Vol. 38:1, p. 69-92
18 WTO, United States — Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products,
Report of the Panel, para. 7.78f.
19 See Koebele, in Wolfrum et al, 2007, p. 183
20 Idem.
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44 | Study on different options for communicating environmental information for products
terminology. Defining Type 2 measures is more difficult. In the recent Mexico-Tuna case, the
panel decided that the US labelling scheme fell in the Type 2 category. Mexican tuna importers
could use the label “dolphin safe” under certain conditions, but were not required to do so as a
pre-condition for exporting their tuna to the US. Based on an earlier Appellate Body case, the
panel in the Mexico-Tuna case decided that the US tuna labelling rules were mandatory in
character.21 However, it should be noted that the Mexico-Tuna decision contains an extensive
dissenting opinion of one (out of three) panel members on this matter. The dissenting member
qualified type 2 measures as voluntary. Dissenting opinions are unusual in WTO jurisprudence.
This shows that there is a certain degree of legal uncertainty concerning type 2 measures.
4.1.1.1 MANDATORY LABELLING SCHEMES
Art. 2 of the TBT contains a number of requirements that mandatory labelling rules, i.e. technical
regulations, have to meet. In addition, Art. 5-9 TBT contain rules on conformity assessments,
which will be relevant if the EU integrates rules on verification of compliance in its future
legislative framework. The latter apply to situations where “a positive assurance of conformity
with technical regulations or standards is required”, as may be the case with an EU
environmental labeling scheme. The most important ones are the following:
National treatment: Art. 2.1., Art. 5.1.1 TBT
Art. 2.1 TBT contains a national treatment rule. Art. 5.1.1 TBT reiterates this rule for conducting
conformity assessments.
The national treatment rules stipulate that “in respect of technical regulations, products
imported from the territory of any Member shall be accorded treatment no less favourable than
that accorded to like products of national origin and to like products originating in any other
country.” Accordingly, this provision forbids any differentiation between imported products and
like products of national origin to the disadvantage of importers. Article 2.1., 5.1.1 TBT prohibit
discrimination between domestic and imported products that are alike.
The first question concerning this clause is what constitutes a “like product.” The Mexico-Tuna
panel was the first WTO panel to interpret the term in the context of Art. 2.1 TBT. However, the
term is also contained in Art. III:4 GATT, which has been extensively discussed in WTO
jurisprudence.22 In this context, there is a long-standing debate about whether different process
and production methods that do not have any bearing on the physical, chemical, health, or other
properties of a final product (e.g. emissions caused in the production process, amount of water
used, etc.) make two products that are otherwise identical “unlike.” For example, is a bottle of
Sauvignon white wine grown organically “like” the same wine produced in a conventional
manner? This discussion is of relevance for environmental labelling to the extent that specific
products receive a label, and others do not, e.g. if according to EU legislation certain products
receive a label as “environmentally friendly” (e.g. organic agricultural products), whereas other
21
WTO, United States — Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, paras. 7.113ff.
22 The Panel in the Mexico – Tuna case found the prior jurisprudence under Art. III:4 GATT to be of relevance to the
interpretation of Art. 2.1 TBT as well.
Chapter 4: Legal considerations
Study on different options for communicating environmental information for products | 45
similar products do not. The issue is of lesser (or no) relevance for a scheme where ALL products
of a certain type (e.g. food products) must be labelled with certain factual and neutral
environmental information (e.g. the emissions caused in its production).
In order to determine whether two products are like, the WTO dispute settlement bodies use the
following criteria:23
Physical properties of the products;
Extent to which the products are capable of serving the same or similar end-uses;
Extent to which consumers perceive and treat the products as alternative means of
performing particular functions in order to satisfy a particular want or demand;
International classification of the products for tariff purposes; and
In addition to these concrete criteria, the competitive relationship between the
domestic and imported product is another criterion to determine whether two
products are alike or not.
When it comes to products that are identical with the only exception of the way they were
produced, the only criterion24 that could normally make two products “unlike” is consumer
perception.25 However, in the Mexico-US Tuna case the panel decided that Mexican tuna and US
tuna were like products, as Mexican tuna was not perceived as being different from US tuna by
consumers. All Mexican tuna, including Mexican tuna that was “dolphin unfriendly” according to
US standards, was thus considered to be “like” dolphin friendly US tuna. Because consumer
perceptions will generally not differ based on the origin of a product or its environmental
performance, it is likely that products that only differ because of production methods would be
classified as like products if one follows the Panel’s line of reasoning. In addition, the Panel
recognised that there is a clear competitive relationship between tuna caught in a dolphin-
friendly manner and other tuna.26 Similarly, there is a competitive relationship between other
products produced in a more environmentally sound way and the same products produced in a
less environmentally friendly way.
Articles 2.1., 5.1.1 TBT forbid only discrimination and contain no rules on technical regulations
that equally apply to domestic and imported products. A technical regulation is only in conflict
with Article 2.1. TBT if it treats imported products less favourably than domestic products, and
according to Art. 5.1.1 TBT the same applies to the way that conformity assessments are
conducted. Importantly, Article 2.1, 5.1.1. TBT forbid any distinction to the disadvantage of
imported products. It is irrelevant whether different treatment of imported and domestic
23
The first case in which this was recognized was Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS9/AB/R, WT/DS10/AB/R; for a later case see for example Appellate Body Report, EC – Asbestos, para. 102.
24 Once it has been settled to which products the proposed EU environmental information legislation should apply,
tariff classification can be reviewed. However, it is not to be expected that, e.g. organic and non-organic products have different tariff classifications. At the WTO level, negotiations on reducing tariffs on environmental goods have been conducted for years but have not been brought to a conclusion.
25 This point was, indeed, made by the EU in a third-party submission in the Mexico-Tuna case, see para. 7.248 of the
Panel report.
26 Regardless of the outcome of this case, it is noteworthy that unlike products can fall within the same product group
of a labelling scheme. Conversely, like products could fall in different product groups of a labelling scheme.
Chapter 4: Legal considerations
46 | Study on different options for communicating environmental information for products
products has an impact or not — there is no de minimis rule which would tolerate minimal
impacts.
It should also be stressed that WTO law does not only forbid de jure, i.e. formally unfavourable
treatment (e.g. a rule that imported products must have a label and domestic ones not) but also
de facto unfavourable treatment. A de facto discrimination exists when imported products fall
predominately into the disadvantaged group of products or if a regulation has a disparate impact
on foreign and domestic like products, thereby altering the competitive conditions for an
imported product.27 An example of de facto discrimination would be a requirement that
environmental labels may only be issued for products that have been certified in the EU, which
would represent a higher hurdle for non-EU producers than for EU producers. As labelling
schemes are very unlikely to formally differentiate on the basis of the product’s origin, de facto
discriminations are the more likely risk scenario.
Applying these general rules, labelling schemes incur a risk of leading to a de facto discrimination:
(newly) imported products depend generally on marketing efforts to enter a market successfully,
while established products require less marketing. This tends to reinforce a competitive
disadvantage for products that are not yet labelled.28 However, it depends on the details of each
specific labelling scheme whether the scheme constitutes an unlawful discrimination, in
particular, against new entrants. In the Mexico-US tuna case, the panel found, for example, that
the US dolphin safe labelling provisions did not discriminate against Mexican tuna products and
are therefore consistent with Article 2.1 TBT. The panel concluded that Mexican tuna products
are not afforded less favourable treatment than tuna products of US and other origins in respect
of the US dolphin safe labelling provisions on the basis of their origin.29 Similarly, EU
environmental labelling requirements could be considered non-discriminatory if applied both to
EU and non-EU products.
In summary, the EU must make sure that neither labelling rules nor the way that a conformity
assessment is conducted discriminate against foreign producers and importers.
Proportionality: Art. 2.2, 5.1.2, 5.2 TBT
According to Article 2.2. TBT, Member States may not adopt technical regulations that create
“unnecessary obstacles to international trade” and according to Art. 5.1.2 TBT conformity
assessment procedures must “not prepared, adopted or applied with a view to or with the effect
of creating unnecessary obstacles to international trade”. Specifically, Art. 2.2. stipulates that
“technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate
objective, taking account of the risks non-fulfilment would create“ and defines a number of such
legitimate objectives, such as the protection of human health or the environment. Art. 5.1.2 says
that “conformity assessment procedures shall not be more strict or be applied more strictly than
is necessary to give the importing Member adequate confidence that products conform with the
27
Vranes, Erich, 2010, Climate Labelling and the WTO - The 2010 EU Ecolabelling Programme as a Test Case under WTO Law
28 Vranes, Erich, 2010, Climate Labelling and the WTO - The 2010 EU Ecolabelling Programme as a Test Case under
WTO Law
29 WTO, United States — Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, paras.
7.113ff.
Chapter 4: Legal considerations
Study on different options for communicating environmental information for products | 47
applicable technical regulations or standards, taking account of the risks non-conformity would
create”. Art. 5.2 contains a number of different requirements for conformity assessments that
spell out in greater details the general principle in Art. 5.1.2. In effect, these norms enshrine a
proportionality rule.
In EC-Sardines, the panel ruled on Art. 2.2 TBT that “Members cannot create obstacles to trade
which are unnecessary or which, in their application, amount to arbitrary or unjustifiable
discrimination or a disguised restriction on international trade.”30 In this context, the panel found
in the Mexico-US tuna case that “the analysis involves an assessment of the degree of trade-
restrictiveness of the measure at issue in relation to what is "necessary" for the fulfilment of the
legitimate objective being pursued, and this can be measured against possible alternative
measures that would achieve the same result with a lesser degree of trade-restrictiveness.”31 This
means that the necessity of a measure always has to be confirmed by comparing it with possible
alternatives. The panel therefore found that “in order to determine whether a measure is more
trade restrictive than necessary within the meaning of Article 2.2, we must assess the manner in
which and the extent to which the measures at issue fulfil their objectives, taking into account
the Member's chosen level of protection, and compare this with a potential less trade restrictive
alternative measure, in order to determine whether such alternative measure would similarly
fulfil the objectives pursued by the technical regulation at the Member's chosen level of
protection.”32
Applying these principles, the panel found a violation of Art. 2.2 TBT by the US. It concluded that
the US dolphin safe labelling provisions are more trade restrictive than necessary to fulfil the
legitimate objectives. The panel found that the US dolphin safe labelling provisions only partly
address the legitimate objectives pursued by the United States and that Mexico had provided the
panel with a less trade-restrictive alternative capable of achieving the same level of protection of
the objective pursued by the US dolphin safe labelling provisions.33
As a result, the EU has to find the least trade-restrictive measure to enable any new labelling
scheme in order to comply with Art. 2.2 TBT. Therefore, any new measure should be weighed
against possible alternatives. The existing case law shows that a claimant can bring up
alternatives in a WTO settlement and proof that these are less trade restrictive. Consequently,
the proportionality of a labelling measure depends on each individual case. Proportionality could
concern, for example, the issue where information is displayed (on the package/shelf), the use of
primary/secondary data and the voluntary/mandatory nature of a scheme (see below). However,
WTO law only forbids more trade-restrictive measures that are equally effective for reaching the
EU’s desired environmental level of protection. For this reason, the EU should define the level of
protection and should prove why/why not different regulatory approaches would be effective in
30
European Communities – Trade Description of Sardines, Report of the Panel, 29 May 2002, WT/DS231/R, para. 7.120 [http://www.tilj.org/journal/42/andenas-zleptnig/Andenas-Zleptnig%2042%20Tex%20Intl%20LJ%20371.pdf]
31 WTO, United States — Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, para.
7.458.
32 WTO Dispute Settlement: Dispute 381 United States — Measures Concernig the Importation, Marketing and Sale of
Tuna and Tuna Products, www.wto.org/english/tratop_e/dispu_e/cases_e/ds381_e.htm
33 Idem.
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48 | Study on different options for communicating environmental information for products
attaining the environmental objectives of the labelling scheme. These are factual questions that
need to be addressed in light of the details of each individual labelling scheme.
The issues of the location of the information and the data source are discussed more in-depth
further below. Concerning the use of a voluntary/mandatory labelling scheme, the EU must
assess whether a voluntary labelling scheme is less trade restrictive than – and equally effective
in informing consumers as – a mandatory system. However, voluntary schemes are often found
to be less effective than mandatory ones in reaching the EU’s desired environmental protection
level.
Concerning conformity assessments, the EU must, again, secure that they are conducted in the
least burdensome way for importers which, at the same time, is still effective for assessing
conformity with the EU rules.
International Standards: Art. 2.4, 5.4 TBT
Art. 2.4 TBT determines that, where international standards exist for technical regulations,
“[m]embers shall use them, or the relevant parts of them, as a basis for their technical
regulations except when such international standards or relevant parts would be an ineffective or
inappropriate means for the fulfilment of the legitimate objectives pursued.“ Art. 5.4 TBT
contains a similar rule for conformity assessments.
There are several international standards on environmental labelling that thus need to be taken
into consideration. Numerous organisations have adopted standards for environmental labelling.
Most notably the International Organization for Standardization (ISO) has set international
standards for labelling of the environmental performance of products or services that should be
taken into account.34 These international standards apply to voluntary and mandatory labelling
schemes alike. ISO 14020 sets out general principles that apply to all environmental claims and
labelling schemes. In detail, there are different ISO standards for three types of labels. :
ISO 14024 -Third Party - (Type I environmental labelling),
ISO 14021- Self-declared environmental claims (Type II environmental labelling),
ISO 14025- Environmental Product declarations - (Type III environmental declarations).
The following Table 5 gives an overview of ISO standards relevant for environmental labelling:
34
Annex 1 TBT refers to ISO definitions and Annex 3 TBT assigns certain tasks to the ISO under the TBT. It is thus very plausible to assume that ISO standards are standards in the sense of the TBT, even though the agreement does not say that explicitly, see Humberto Zúniga Schroder (2009): Definition of the Concept ‘International Standard‘ in the TBT Agreement, Journal of World Trade Vol. 43:6, p. 1223-1254
Chapter 4: Legal considerations
Study on different options for communicating environmental information for products | 49
Table 5: ISO standards relevant for environmental labelling
Standard Description
Type I – Third Party
Certified Environmental
Labelling: ISO 14024
According to ISO-14024, environmental labelling is "a voluntary, multiple-
criteria based, third party program that awards a license which authorizes the
use of environmental labels on products indicating overall environmental
preferability of a product within a particular product category based on life
cycle considerations."
Type II – Self-declared
environmental claims:
ISO 14021
ISO 14021 specifies requirements for self-declared environmental claims
including statements, symbols, and graphics on products. This means that
manufacturers, importers, or distributers of products make environmental
claims about their goods (e.g. made from XY% of recycled goods). ISO 14021
requires that all claims have to be backed by bona fide and readily available
third-party information. There also has to be an explanatory statement, which
explains the reason for the claim.
Type III – Environmental
Product Declarations
(EPDs): ISO 14025
defines
ISO 14025 defines EPDs as "quantified environmental data for a product with
pre-set categories of parameters based on the ISO 14040 series of standards,
but not excluding additional environmental information." Type III labels are
awarded based on a full life cycle assessment. The parameters are set by a
qualified third party and verified by that or another qualified third party. Type
III labels enable the customer to compare between products fulfilling the same
function without judging the products. Examples are the Fair Trade label or the
Forest Stewardship Council label.
Against this background, labels must be based on international standards, either entirely or the
relevant parts of them. Whenever there is an applicable standard, it must be taken into account.
ISO-14024, 14021, and 14025 are examples of relevant ISO standards. Accordingly, new label
schemes would have to be based on those ISO standards.
However, article 2.4 TBT provides for an exception to this general rule: mandatory labels need
not be based on international standards when such “standards or relevant parts would be an
ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued.” Art.
5.4 TBT contains a similar rule for conformity assessments. Ineffective or inappropriate means
were defined by the panel in the EC - Sardines case where Peru complained that a European
regulation prevented Peruvian exporters from continuing to use the trade description “sardines”
for their products: ”[...] in the context of Article 2.4, an ineffective means is a means which does
not have the function of accomplishing the legitimate objective pursued, whereas an
inappropriate means is a means which is not specially suitable for the fulfilment of the legitimate
objective pursued. An inappropriate means will not necessarily be an ineffective means and vice
versa.”35 In summary, “ineffective” stands for “not having a result” and inappropriate for “not
specifically fitting or suitable.”
35 European Communities – Trade Description of Sardines, Report of the Panel, 29 May 2002, WT/DS231/R, para. 7.116
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50 | Study on different options for communicating environmental information for products
In the Mexico-US tuna case, the panel found that the relevant international standard for the
purposes of the US dolphin safe provisions existed and that the United States had not used it as
basis for its measures. However, the panel concluded that the international standard would not
be appropriate or effective to achieve the US objectives, as it did not fulfil one of the two US
regulatory objectives, i.e., avoiding consumers from being misled or deceived (WTO, 2011).
Therefore, the exemption of Art. 2.4 TBT applied and it did not matter that the US had not based
its label on existing international standards.
As a result, the EU can introduce labels that are not based on existing international standards and
nonetheless comply with Art. 2.4 TBT if there is a legitimate objective which is not properly
covered by the standards. Whether the exemption, however, can be applied to a certain label,
depends on the individual case.
Environmental exemption clause
Unlike the GATT, the TBT does not contain a general environmental exemption clause. It has
been suggested that, in one way or another, an exemption for environmental measures — similar
to Art. XX of the GATT — is built into the TBT.36 This line of argument builds on the preamble of
the TBT, which recognizes that countries may take “measures necessary [...] for the protection
[...] of the environment.” However, the absence of a provision similar to Art. XX GATT is a strong
argument against an unwritten exemption clause. In addition, Art. 2.2 TBT makes reference to
objectives in pursuit of which it is legitimate to restrict trade. In this sense, Art. 2.2. serves a
similar purpose as the general exception clause of Art. XX of the GATT. This line of argument is
supported by the recent Mexico-US tuna decision. In this case, the panel did not discuss any
environmental exemptions after having found that the US had violated Art. 2.2 TBT. This casts
doubt on whether the WTO dispute settlement bodies, which generally put a lot of emphasis on
the literal interpretation of the WTO agreements, would be willing to accept such an unwritten
environmental exemption under the TBT.
4.1.1.2 TBT RULES ON NON-MANDATORY LABELLING SCHEMES
The TBT includes a number of rules for the preparation of (voluntary) standards, such as labelling
rules. These are contained in Art. 4 TBT. Art. 4 mandates that WTO members should ensure that
their “central government standardizing bodies” accept and comply with the Code of Good
Practice for the Preparation, Adoption and Application of Standards in Annex 3 (“Code of Good
Practice”). While it is doubtful that the Commission is a “central government standardizing
body37,” a teleological38 interpretation of Art. 4 could support the view that the Commission
would also be bound by the Code should it adopt a voluntary scheme.39 It is thus recommendable
36
Vranes, Erich, 2010.
37 Central standardising bodies in the EU are the European Committee for Standardisation, the European Committee
for Electrotechnical Standardization and the European Telecommunications Standards Institute.
38 Teleological interpretation means interpreting a legal norm based on the objective it is to achieve.
39 An explanatory note on Art. 1.6 TBT makes it clear, at least, that the EU may be considered a central government
body. Only where regional bodies or conformity assessment systems within the EU are established, the TBT provision on regional bodies or conformity assessment systems would apply.
Chapter 4: Legal considerations
Study on different options for communicating environmental information for products | 51
that the EU takes these rules into account when designing its labelling scheme.The major rules
contained in the Code are the following:
Art. D Code of Good Practice is identical to Art. 2.1 TBT, i.e. it contains the
requirement that imported like products are treated no less favourably than domestic
products, introducing a non-discrimination rule.
Art. E Code of Good Practice repeats the first part of Art. 2.2 TBT, i.e. contains a
requirement that standards do not create unnecessary obstacles to international trade,
hence a proportionality rule.
Art. F Code of Good Practice is similar to Art. 2.4 TBT, i.e. contains a requirement to
use existing international standards as basis for technical standards, except where such
international standards or relevant parts would be ineffective or inappropriate.
The rules in Art. 5 TBT on conformity assessments also apply to non-mandatory schemes.
Thus, the WTO rules for mandatory and voluntary labelling schemes are very similar in wording,40
and it is thus most likely that the WTO dispute settlement bodies would interpret them in a
similar way.
4.1.1.4 SPECIFIC ISSUES
In this section, we will discuss some specific issues that are likely to be of relevance for future EU
legislation on environmental labelling.
Third-party Verification
Third-party verification occurs when an independent, neutral entity assesses and certifies that a
given product meets the requirements of given standards. There is a large number of Accredited
Certification Bodies, which offer ISO certified third-party verification. These organisations are
approved by a national authority to perform audits in line with a standard (e.g. ISO 14000) and to
verify that an audited facility meets the requirements for the certification.
In light of the requirements discussed above, EU rules regulating third party verification or
verification by member states must ensure41 that:
it does not discriminate against importers de jure or de facto
it is not more trade restrictive than necessary to fulfil a legitimate objective, and
it is based on international standards, where applicable
complies with the other requirements contained in Art. 5.2 TBT
According to Art. 8.2 TBT, the EU is only allowed to rely on verification by private actors if it
ensures that these standards are met.
Regarding restrictions on trade, third-party verification must avoid overly burdensome
procedures which risk being incompatible with WTO law if less restrictive and equally effective
40 Koebele/La Fortune, in: Wolfrum et al. 2007, p. 248.
41 This follows from Art. 7, 8 TBT.
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52 | Study on different options for communicating environmental information for products
alternatives are available. Relevant (ISO) standards must be taken into account. Label schemes
may only diverge from (ISO) standards if these are inadequate or ineffective (see above). This can
only be determined when the details of a label scheme are known.
In addition, Art. 6 TBT contains rules on the mutual recognition of conformity assessments by
central government bodies. According to Art. 6.1 TBT, the EU should, in principle, recognise
conformity assessments carried out by entities in other WTO members. However, Art. 6.1 TBT
states that they must be recognised only “wherever possible”, and the remaining paragraphs of
Art. 6 TBT describe that recognition may require prior negotiations and agreements with other
WTO members. While thus the mutual recognition obligation in Art. 6 TBT is not required
unconditionally, it is advisable that the EU include in its legislation provisions on the conditions
under which conformity assessment can be carried out outside the EU and by non-EU actors.
They do not necessarily have to be recognised “on the spot”, but the EU should at least open
avenues to other WTO members for negotiations on this matter.
Primary and Secondary Data
Another issue to examine includes to what extent the verification should be based on primary
data (data that is measured and gathered in-person and on-site) or on secondary information
(data that has been derived from averages, statistical projections, and spot-checked primary
sources). WTO law does not contain any specific rules on data collection.
The data collection method could become relevant in the context of Art. 2.2, 5 TBT and their
proportionality requirement. As described above, Art. 2.2 TBT mandates that no alternative
measures exist that are less trade restrictive and at the same time equally effective. For this
reason, the EU should determine whether equally effective but less trade restrictive methods of
data collection exist. Art. 5.2.3 TBT stipulates that information requirements must be limited to
what is necessary to assess conformity. In addition, any method for data collection must not be
formally or factually discriminatory. Anything that would make it more difficult for producers and
importers from outside the EU to fulfil the requirements than for EU actors, is not consistent with
WTO law. These are factual questions, depending on the details of each individual labelling
scheme, which the EU should thoroughly scrutinise while developing future policies.
Finally, labelling schemes falling under specific ISO standards need to be based on the respective
standards (see above 0).
Design and location of eco-labels
The design of the labels as discussed in this report is unlikely to raise issues under WTO law.. It is
irrelevant whether a label is designed in green or red, or whether it uses text or only graphics. The
location of the information – either on the packaging, on the shelf, or via a “flash code” – could
potentially become relevant in the context of the proportionality test in Art. 2.2 TBT.
The EU must assess whether a regulation requiring labelling on the package of a product is more
trade restrictive than one requiring the provision of labels to be displayed in the shop where a
product is sold, while at the same time being equally effective. From the perspective of an
importer, it may be less burdensome to provide environmental information to the retailer than to
print the information on the package of the products themselves. However, only if the display of
the information in the shop is as effective at informing consumers of the environmental impact of
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Study on different options for communicating environmental information for products | 53
the product and is less trade restrictive, WTO proportionality rules require displaying
environmental information in the shop. Again, this is a factual question that the EU should
investigate once the policy choices are made.
Moreover, rules on the location of the information must not discriminate against non-EU
producers and importers. It is difficult to see, though, how EU legislation not discriminating
formally against non-EU actors in this regard would have a discriminatory effect.
Finally, to the extent that the ISO standards contain relevant rules, these should also be taken
into account.
4.1.2 GATT
The other relevant agreement concerning environmental labelling rules is GATT, in particular its
Art. III:4. This article is very similar to Art. 2.1 TBT as it prohibits the unequal treatment of “like”
products. Therefore, the above discussion on “like products” is of relevance for Art. III:4 GATT as
well.
One difference to the TBT is, however, that even if a measure violates Art. III:4 GATT, it may still
be justified. The relevant norm is Art. XX GATT. It allows WTO members to take, inter alia,
measures that are “necessary to protect human, animal or plant life or health” (Art. XX b) or
“relating to the conservation of exhaustible natural resources if such measures are made
effective in conjunction with restrictions on domestic production or consumption” (Art. XX g). In
addition, these measures must be non-discriminatory and must not constitute a disguised
restriction on international trade. With regard to environmental consumer information, the
question is hence whether there is a sufficient link between the information and the protection of
exhaustible natural resources42 or whether the information is necessary for the protection of
human, animal or plant life or health (e.g. because biodiversity-related information is provided).
In addition, the labelling rules must not privilege certain producers over others. To what extent
these conditions are fulfilled will have to be discussed for each proposed option of environmental
consumer information individually.
4.2 Recommendations to avoid WTO inconsistency of
environmental labels
In light of the above, there are certain factors that will influence the WTO compatibility of an EU
environmental labelling scheme:
EU legislation on environmental labelling must not be discriminatory, i.e., it should not
make any de jure or de facto difference between imported and domestic products.
42 For example, clean air was recognised as an exhaustible natural resource by the WTO dispute settlement in the case
United States — Standards for Reformulated and Conventional Gasoline, (WT/DS2/AB/R), available at http://www.wto.org/english/tratop_e/envir_e/gas1_e.htm
Chapter 4: Legal considerations
54 | Study on different options for communicating environmental information for products
The EU’s legislation should clearly refer to the environmental objectives of the
measure and, optimally, define a certain level of protection sought. It should avoid any
reference or statement implying that environmental information rules serve the
protection of the internal market.
The EU should have sound arguments for why the environmental labelling rules chosen
are the least trade-restrictive measures conceivable for the objective it pursues. For
this, the EU must be able to show that there are no alternative, less trade-restrictive
measures available that are equally effective in reaching the desired aim (e.g. general
information campaigns). Proportionality could become an issue when the EU chooses
between a voluntary and mandatory labelling scheme, concerning the location of the
information displayed and the data source used.
The EU must take into account respective ISO standards on environmental labelling.
However, there are also some factors that are — in principle — unlikely to affect the WTO
compatibility of a label. These include
Its design;
Which and what types of PPM-related environmental information are included in the
label (e.g. CO2 emissions and information on other air pollution or only information on
one of them), as long as for each type of information, the above conditions (i.e., non-
discrimination, proportionality) are met;
Whether third party verification is used as long as it is non-discriminatory and
proportional and verifiers outside the EU are also, in principle, accepted;
Whether the label is voluntary or mandatory (depending on the details of the labelling
scheme and the proportionality test); and
Whether the Commission proposes a directive or a regulation; substance and
procedural rules contained in the legislation are the key WTO issues.
Against this backdrop, other important considerations to keep in mind when analysing
communication options include:
Assessing how burdensome different possible options are for importers and whether
they pose different hurdles for importers from different countries, and
Assessing different options and their effectiveness in terms of reaching the EU
regulatory objectives in order to ensure there is no alternative that is less trade
restrictive.
References and further reading
Study on different options for communicating environmental information for products | 55
References and further reading
Ademe, Afnor, 2011, « Note du collectif d’associations de consommateurs sur le format
d’affichage » Summary of responses from consumer associations on communication
support of environmental information
Appleton, Arthur E., 2000, The labelling of GMO products pursuant to international
trade rules, New York University Environmental Law Journal, Vol. 8:3, p. 566-578
Banks, Martin, 16 March 2010, “MEPs reject traffic light system for food labelling”
[Accessed online 25/03/2010: www.theparliament.com/no_cache/latestnews/news-
article/newsarticle/meps-reject-traffic-light-system-for-food-labelling/]
BIO, et al., 2011, Policies to Influence Sustainable Consumption. Report for the
European Commission, Report for DG Environment, study currently in process
BSR, 2008, Eco-promising: communicating the environmental credentials of your
products and services
Cheyne, Ilona, 2009, Proportionality, Proximity and Environmental Labelling in WTO
Law, Journal of International Economic Law, Vol. 12: 4 (December 2009), pp. 927-952
Dröge, Susanne, 2001, Ecological Labelling and the World Trade Organization, DIW
Discussion Paper No. 241, Berlin
Ernst & Young, 2009, Pistes pour un étiquetage environnemental lisible et efficace
Ernst & Young, 2010, Product Carbon Footprinting – a study on methodologies and
initiatives
European Communities – Trade Description of Sardines, Report of the Panel, 29 May
2002, WT/DS231/R, para. 7.116
Eurobarometer, 2009, Attitudes of European citizens towards the environment
European Food SCP Round Table, 2011, Communicating environmental performance
along the food chain, draft for public consultation until the 15th of September 2011,
www.food-
scp.eu/files/consultation2/Communicating_environmental_performance_along_the_f
ood_chain.pdf
Faculty of Public Health, 2008, Traffic-light food labelling, A position statement
Faludi, Jeremy and Dawn Danby, www.worldchanging.com/archives/007256.html
IISD, UNPE, 2005, Environment and Trade: A Handbook,
http://www.iisd.org/trade/handbook/5_1.htm
Joshi, Manoj, 2004, Are Eco-Labels Consistent with World Trade Organization
Agreements?, Journal of World Trade Vol. 38:1, p. 69-92
References and further reading
56 | Study on different options for communicating environmental information for products
Koszewska M.; Social and Eco-labelling of Textile and Clothing Goods as a Means of
Communication and Product Differentiation. Fibres and Textiles in Eastern Europe
2011, Vol. 19, No. 4 (87) pp. 20-26.
Microsoft Advertising, 2010, Retail Mobile Marketing: The Power of Connected
Consumers, Mobile devices are no longer being used solely as a means of getting
information on the go. So how does this impact retailer advertising? Five answers.
Norm Borin, Douglas C. Cerf and R. Krishnan, 1 Nov, 2011, Consumer effects of
environmental impact in product labelling, Journal of Consumer Marketing
OECD, 2002, Policies to promote Sustainable Consumption: An economic conceptual
framework. Paris, Organisation for Economic Cooperation and Development, OECD.
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Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit/Bundesverband
der Deutschen Industrie e.V./Umweltbundesamt, Berlin
PSI et al. 2009, Designing policy to influence consumers: Consumer behaviour relating
to the purchasing of environmentally preferable goods
Steijger, Lennert, 2005, Genetically modified food for thought: EU labelling legislation
examined under the GATT 1994, Tilburg Foreign Law Review, Vol 12, p. 297-323
Vranes, Erich, 2010, Climate Labelling and the WTO - The 2010 EU Ecolabelling
Programme as a Test Case under WTO Law
Wolfrum, Rüdiger/Peter-Tobias Stoll/Anja Seibert-Fohr/Max-Planck-Institut für
Ausländisches Öffentliches Recht und Völkerrecht WTO: technical barriers and SPS
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WTO, United States — Measures Concerning the Importation, Marketing and Sale of
Tuna and Tuna Products, Report of the Panel, 15 September 2011, WT/DS381/R,
www.wto.org/english/tratop_e/dispu_e/cases_e/ds381_e.htm
Yates Lucy, 2009, Understanding Green Claims in Advertising, Consumer Focus Report
Young, William et al.,2008, Sustainable consumption: green consumer behaviour when
purchasing products
Zedalis, Rex, 2001, Labelling genetically modified food - the limits of GATT Rules,
Journal of World Trade Vol. 35:2, p. 301-347
Zúniga Schroder, Humberto 2009, Definition of the Concept ‘International Standard‘ in
the TBT Agreement, Journal of World Trade Vol. 43:6, p. 1223-1254
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